ACCC says no to BP's acquisition of Woolworths service stations

The ACCC intends to oppose the proposed acquisition by BP Australia Pty Ltd of Woolworths Limited’s (ASX:WOW) network of retail service station sites.
Woolworths currently operates 531 sites and has 12 sites in development. BP supplies fuel to approximately 1,400 BP-branded service stations throughout Australia, setting fuel prices at roughly 350 of them.
“We consider that BP acquiring Woolworths’ service stations will be likely to substantially lessen competition in the retail supply of fuel,” ACCC chairman Rod Sims said.
“Woolworths is a vigorous and effective competitor that has an important influence on fuel prices and price cycles in many markets throughout the country. Many consumers seeking out cheaper petrol will head to Woolworths petrol stations.
“BP prices are significantly higher on average than Woolworths prices in the major capital cities (see charts below). BP generally increases prices faster than Woolworths during price increase phases, and is slower to discount during the price discounting phase of cycles,” Mr Sims said.
“We believe that fuel prices will likely increase at the Woolworths sites if BP acquires them and other retailers would then face less competitive pressure. The bottom line is that we consider motorists will end up paying more, regardless of where they buy fuel, if this acquisition goes ahead.
“Fuel is a major expense for many households, and even a small increase in prices due to reduced competition will have a major impact on drivers,” Mr Sims said.
“This acquisition will likely affect metropolitan price cycles by making the price jumps quicker, larger and more coordinated. Reduced competition will also mean that prices will not fall as far, or as quickly, in the discounting phase of the cycle,” Mr Sims said.
In forming its view, the ACCC conducted extensive data analysis of all major retailers’ fuel prices to determine the effect that BP and Woolworths have in both local and metropolitan-wide areas.
The ACCC considered whether the competition concerns in metropolitan and local areas could be addressed by divesting sites.
“This has been the most significant merger investigation and decision the ACCC has considered in 2017. The ACCC has determined that the underlying concerns arising from the proposed acquisition would not be addressed by the divestments proposed by BP,” Mr Sims said.
The ACCC took into account a large number of submissions from a broad range of market participants including motoring groups, competitors, and both corporate and individual consumers.
Price charts
The chart below, which was published in October when the ACCC released its study into the Brisbane petrol market, highlights the difference between each major retailers’ average regular unleaded petrol (RULP) price and the market average RULP price in Brisbane in the period 1 January to 30 April 2017.

Major retailers’ average regular unleaded petrol (RULP) price and the market average RULP price in Brisbane in the period 1 January to 30 April 2017. Source: ACCC calculations based on data from Informed Sources. Originally published in ACCC: Report on the Brisbane petrol market. Note: Informed Sources collects price data electronically from its subscribers and manually for other brands. Note: COCO means BP company-owned and operated sites, and excludes BP dealers sites; “cpl” is cents per litre.

The chart below shows the average price at BP company controlled sites and Woolworths sites, compared to the city-wide average, in each of Sydney, Melbourne, Brisbane and Perth, for the period of 1 January 2015 to 28 March 2017. The results for Brisbane are different to the above chart due to the different data-sets analysed.
Average price at BP company controlled sites and Woolworths sites, compared to the city-wide average.
Source: ACCC calculations based on data from Informed Sources.

More information is available on the ACCC’s public register: BP – proposed acquisition of Woolworths’ retail service station sites
Related but separate decision on authorisation applications regarding Shopper Docket and Rewards Loyalty Program
In a separate decision, and applying a different legal test, the ACCC was also required to consider authorisation applications from Woolworths and BP relating to aspects of their proposed commercial alliance.
The ACCC has decided to grant those applications for authorisation subject to conditions.
These conditions specify that BP and Woolworths must limit shopper docket and loyalty scheme discounts to no more than 4 cents per litre (in total per fuel purchase). Woolworths would not be permitted to fund more than 2 cents of the 4 cent discount.
While discounts to consumers are generally beneficial, the ACCC has long-standing concerns that fuel discounts offered through shopper docket or similar schemes can have anti-competitive effects if they are at a level that efficient fuel retailers are unable to match. The ACCC has also expressed its concern about the potential for supermarket funding of fuel discounts to distort competition in fuel retailing.
The conditions have been imposed to address these concerns.
However, the authorised conduct would only occur in the event BP acquires Woolworths’ network of service stations. As noted above, the ACCC today announced that it intends to oppose that proposed acquisition.
Further information, including a copy of the decision, is available from the ACCC’s public register: BP & Ors – Authorisations – A91580, A91581 & A91582.
Background information
The ACCC commenced a public review of the proposed acquisition on 15 March 2017 under the informal merger review process. On 28 April 2017, the ACCC commenced the related, but separate, Authorisation process for the loyalty program and shopper docket discount scheme.
The ACCC’s assessment of the proposed rollout of Woolworths’ Shopper Docket Discount Scheme and Loyalty Program was conducted separately to the assessment of the proposed acquisition. These two assessments have been undertaken separately because Woolworths and BP applied for authorisation of some aspects of the proposed transaction under a specific authorisation process set out in the Competition and Consumer Act 2010, and also sought clearance for BP to acquire Woolworths’ petrol stations under the ACCC’s informal merger clearance process, which is a separate process. As required by the Competition and Consumer Act 2010, the ACCC did not take into account any detriments or any benefits resulting from the proposed acquisition (if it were to proceed) as part of its assessment of the authorisation applications.
On 10 August 2017, the ACCC released a Statement of Issues in relation to the proposed acquisition outlining preliminary competition concerns. On 29 August 2017, the ACCC released a Draft Determination in relation to the Authorisation process (BP & Ors – Authorisations – A91580, A91581 & A91582).
BP supplies fuel to approximately 1,400 BP-branded service stations throughout Australia. Of these sites, BP controls approximately 350 sites, via ownership or commission agency arrangements. Additionally, BP sets the price of diesel only at approximately a further 30 ‘diesel commission agency’ sites. At the remaining BP-branded sites prices are set independently by third-party site operators.
Woolworths Limited currently operates 531 sites and has 12 sites in development. Woolworths entered fuel retailing in the late 1990s, establishing service stations that offer fuel discounts to those purchasing groceries at its stores. In August 2003, Woolworths entered into an alliance with Caltex to operate dual-branded service stations. These dual-branded sites are operated by Woolworths and obtain all fuels from Caltex.

Woolworths reaffirms ethical fresh food supply chain commitment

Woolworths has reaffirmed its commitment to ensuring that the human rights of all workers in the company’s operations and supply chains are protected.
As part of Woolworths’ continuing review of its ethical sourcing practices, the supermarket chain has committed to working collaboratively with the National Union of Workers (NUW) and other interested stakeholders, to identify and address human rights risks in fresh food supply chains in Australia.
“Our belief is that finding the right solution to address human rights risks in horticultural supply chains in Australia will be best achieved by working collaboratively with farmers, governments and unions,” Brad Banducci, CEO, Woolworths Group, said.
“We recognise the current efforts of these stakeholders, including the NUW, and are committed to actively participating in a process to deliver genuine improvements and sensible and practical reform.”
As part of the commitment, and following discussions with the NUW and the Australasian Centre for Corporate Responsibility (ACCR), Woolworths has committed to implementing an agreed pre-qualification programme for labour-hire providers, and educate workers in Woolworths’ supply chains about their workplace rights. This includes the right to join a labour union of their choice, have access to an effective grievance mechanism to ensure that human rights violations are reported, investigated and remediated, and be protected if reporting human rights violations.
“These commitments will give effect to our pledge in our Woolworths Group Corporate Responsibility Strategy 2020 to work with peak organisations to improve workers’ lives,” said Banducci. “They also strengthen Woolworths’ ability to manage human rights risks and ensure compliance with Woolworths’ Ethical Sourcing Policy and Policy for Employing or Engaging Overseas Workers.”

What makes a supply chain tops in APAC?

This year marks the 13th anniversary of the Gartner Supply Chain Top 25 — an annual recognition of achievement and advancement of supply chain capabilities.
Here are the highlights of the Gartner Asia/Pacific top nine companies.
No. 1 — Lenovo (No. 24 in Gartner’s Global Supply Chain Ranking)
Lenovo moves up to the No. 1 spot within the Asia/Pacific region for 2017 as the Chinese high-tech company continues as a leader in the mature PC market, selling four devices every second.
Investments in digital capabilities, such as predictive analytics, are paying off, allowing the business to simulate threats and opportunities while driving forecast accuracy improvements and optimising inventory holdings. Coupled with a mature S&OP process and a shift from traditional product-centric to more customer-oriented quality measures, the business is on a strong footing for continuing success.
Upstream, Lenovo is implementing an enterprise-grade visibility and risk management tool to improve performance in sourcing, manufacturing and logistics. While it has increased ownership of factories over the past several years and is using network optimisation to drive capacity utilisation across business units. Lenovo is also investing in smart manufacturing, including automation, toward a goal of having the most advanced factories in the PC industry.
No. 2 — Samsung Electronics (No. 25 in Gartner’s Global Supply Chain Ranking)
Samsung takes the second spot on the Asia/Pacific list in 2017 down from No. 1 in 2016. The Korean consumer electronics giant also dropped significantly in the global rankings this year from No. 8 to No. 25 on the back of governance failures that lead to the much publicised quality issues with the Galaxy Note 7 smartphone batteries.
While the resulting product recall was a blow to the brand’s reputation, a continued long-term focus on core fundamentals, such as supply chain agility,  supplier/customer integration and end-to-end value chain collaboration, has helped maintain a strong peer vote and enabled it to solidify the No. 2 spot. A lower-than-average CSR score of 4 out of 10 is an improvement opportunity for it to regain its leader status in the region.
No. 3 — Huawei (No. 26 in Gartner’s Global Supply Chain Ranking)
Chinese multinational Huawei moves up two places from last year to No. 3, driven by enviable growth in recent years, sporting a 31.3% three-year average revenue growth rate, as it climbed to No. 3 in the global smartphone market. Strong customer partnerships, digital supply chains and smart factories had been the key drivers of the Huawei supply chain capability improvements. In addition, a strong focus on sustainability reflected in Huawei developing more energy-efficient products with minimal environmental impacts, while reducing carbon emission and conflict materials across its global supply chain. Longer term, and in conjunction with its strategy to become a major global player, Huawei has also developed a vision that embraces the goal of being a responsible value-driven organisation. Pursuing strong growth and customer orientation through cost innovation and risk mitigation in collaboration with suppliers and customers, the company also strived to improve cybersecurity of its products.
No. 4 — Toyota (No. 31 in Gartner’s Global Supply Chain Ranking)
As the only business to have placed in the top 10 within the Asia/Pacific region every year since 2007, Toyota is an extremely consistent performer. The business has a strong track record of investing in new digital technologies with significant deployment of robotics and autonomous guided vehicles across its manufacturing facilities. New investments in innovative technologies are being made through the Toyota Research Institute (TRI), which has recently partnered with MIT to investigate how blockchain technology can be used to securely share and monetise businesses and individual driving information. The TRI also recently established a $100 million fund, called Toyota AI Ventures, to provide early-stage financing to startups focused on key technologies, including artificial intelligence, robotics and autonomous mobility. A number of notable investments in new manufacturing capacity are also being made, such as the development of a new $1 billion facility in Guanajuato, Mexico and $300 million investment into its existing Burnaston plant in the UK.
No. 5 — Bridgestone (No. 51 in Gartner’s Global Supply Chain Ranking)
A new entrant to the Top 25 for 2017, Japanese auto parts manufacturer Bridgestone has come in at No. 5 on the Asia/Pacific list and No. 51 overall.
A range of initiatives and technology investments focused on integrating the supply chain planning functions (production planning, distribution planning and transport planning) in recent years has allowed the Japanese auto parts manufacturer to substantially improve overall visibility of available products to end customers. This improved supply chain integration is now proving to drive higher levels of customer satisfaction while simultaneously reducing overall supply costs.
Bridgestone also impressed on the CSR front by taking an end-to-end view of its impact on the environment. For example, Bridgestone estimates that around 90% the CO2 emissions produced by tyres actually occur after they have been fitted to the vehicle, and have invested in a range of technologies including “ologic” to optimise tire design. The result is reduced aerodynamic and rolling resistance that improves the fuel economy of the vehicle itself. This proactive and comprehensive approach to its CSR policies helped it score a 9.00 in that portion of the rating.
This Chinese manufacturer jumped one position in its ranking among Asia/Pacific supply chains, while advancing 13 places overall compared to 2016 rankings — supported by strong three-year revenue growth. A winner of a Gartner Chainnovator Award 2017, Haier has been investing strongly in transforming its supply chain through digitalisation. Haier’s “Interconnected Factory” seeks to improve customer experience through integrating demand into supply chain and factory processes — by developing an end-to-end ecosystem that promotes a shift from mass production to mass individualisation. A part of Haier’s supply chain success has also come through its successful strategy of globalisation and developing R&D, design and production capabilities closer to market.
However, with a CSR score which currently stands at 2.00 — the lowest among the group — the company has opportunities to improve its CSR activities.
No. 7 — Wesfarmers (No. 59 in Gartner’s Global Supply Chain Ranking)
A new entry to the list at No. 7 is Wesfarmers, a retail-industrial conglomerate with significant Australian focused operations across a variety of retail segments, from grocery to department stores, home improvements and office supplies. The business operates dedicated supply chains across its various brands that support over 4,000 retail locations.
Recent investments in the KUKA robotic system within Wesfarmers grocery-focused business, Coles, are a proof point of its focus on optimising and digitising its supply chain capabilities. Its Officeworks brand has leveraged its “every channel” strategy that focuses on integrating physical and online channels to become a true unified commerce leader. Headwinds do lie ahead for the business, with Amazon and other international players building or expanding their Australian operations while Wesfarmers attempts to integrate its recent acquisition of U.K. home improvements retailer, Homebase.
No. 8 — Woolworths (No. 75 in Gartner’s Global Supply Chain Ranking)
Australian grocery giant, Woolworths, dropped four places in Asia/Pacific, and a substantial 37 places on the global ranking in 2017. Low scores across the areas of revenue growth and ROA have severely impacted its placement in this year’s list.
Woolworths is taking a back-to-basics approach and focusing on value chain collaboration and improving supply through the brokering of longer-term supplier relationships. If it can combine this with previous investments in demand sensing capabilities, it should be in a strong position to comprehend the rapidly changing consumer environment and make informed trade-off decisions to optimise the flow of goods in and out of its network in the future.
Woolworths also continues to push hard toward its CSR targets across three main pillars — people, planet and prosperity. Lofty 2020 targets, such as employing 40% women in the executive and senior management teams, zero food waste going to landfill, net zero deforestation for high impact commodities such as palm oil and timber and dedicating 1% of earnings (three-year rolling average of EBIT) to community programs, have seen it achieve a score of 9.00 for its CSR policies in this year’s evaluation.
No. 9 — Sony (No. 103 in Gartner’s Global Supply Chain Ranking)
Sony, the Japanese conglomerate moved up one position in the Asia/Pacific list and eight positions in the global list from 2016. The company continues to face economic headwinds and its three-year revenue growth slowed significantly compared to last year. It improved its ROA marginally, while maintaining its CSR score. Sony showed its commitment toward CSR by implementing EICC framework to monitor compliance in its electronics manufacturing sites in and outside of Japan. The company has set targets for reducing environmental impact of logistics through a series of measures, including lightweight and compact product design, and optimising shipping efficiency.
Supplier risk assessment and compliance to Sony Supply Chain Code of Conduct is an essential part of Sony’s strategy to ensure supply reliability. On the other hand, process automation helps the company respond to the markets quickly, which is also supported by a centralised inventory management system.

ACCC positive on Woolworths and BP tie-up

The Australian Competition and Consumer Commission has issued a draft decision proposing to grant conditional authorisation to a commercial alliance between BP Australia Pty Ltd, BP Resellers, and Woolworths Limited (ASX:WOW).
Authorisation would allow participating BP service stations to accept Woolworths shopper dockets and participate in the Woolworths Rewards loyalty program, if BP is successful in acquiring Woolworths’ service stations.
“Customers value fuel-related discounts and loyalty programs. We believe giving consumers more opportunities to redeem shopper docket discounts and earn and redeem points through Woolworths’ loyalty program will likely result in some public benefits,” ACCC chairman Rod Sims said.
However, the ACCC has long-standing concerns that these kinds of fuel discounts can have anti-competitive effects if they are at a level that is unable to be matched by otherwise efficient fuel retailers.
“The ACCC considers that fuel discount offers in excess of 4 cents per litre could have longer-term effects on the structure of the retail fuel markets and that the detriments from reduced competition may outweigh any benefits,” Mr Sims said.
To address this potential harm, the ACCC is proposing to grant authorisation on condition that the parties do not offer fuel discounts from shopper dockets and the loyalty scheme in excess of 4 cents per litre in total.
These proposed shopper docket and loyalty scheme arrangements form part of a broader transaction between BP and Woolworths, where BP is proposing to acquire Woolworths’ network of service stations. The ACCC is conducting a separate merger review of that proposed acquisition.
The proposed shopper docket and loyalty scheme arrangements will only occur if the proposed acquisition is completed.
The ACCC has not taken into account any detriments from a lessening of competition or any benefits resulting from the proposed acquisition as part of its assessment of the authorisation applications.
“The proposed acquisition by BP of Woolworths service stations is subject to separate consideration by the ACCC. This draft decision regarding authorisation does not in any way indicate the ACCC’s view of the proposed acquisition,” Mr Sims said.
The ACCC has published a Draft Determination: BP Australia Pty Ltd & Ors – Authorisations – A91580 – A91582.
The ACCC is now seeking submissions before making its final decision. Submissions should be provided to the ACCC by 18 September 2017. The ACCC expects to release its final decision in October 2017.
ACCC merger review of related proposed acquisition
On 10 August 2017 the ACCC released a Statement of Issues outlining the Commission’s preliminary views on BP’s proposed acquisition of Woolworths’ petrol sites.
The ACCC proposes to release a final decision on the proposed acquisition on 26 October 2017.
Woolworths’ undertaking on petrol discounts
In December 2013 Woolworths (and Coles) provided court enforceable undertakings in relation to their fuel discount offers following the identification of competition issues by the ACCC. The undertakings prevent Woolworths and Coles from offering discounts on fuel if the discount is funded from outside Woolworths’ and Coles’ petrol divisions and where the discount is more than 4 cents per litre and contingent on purchases made outside the petrol division.

Woolworths appoints Tesco veteran as Managing Director

Australian supermarket giant Woolworths Group has announced the appointment of Claire Peters as Managing Director, Woolworth Supermarkets.
Peters will lead a team of more than 115,000 team members across 992 supermarkets, reporting to CEO Brad Banducci. She brings more than 20 years of retail experience to the role, most recently as Chief Operating Office of Tesco Thailand, where she has overall responsibility for the supermarkets supply chain and logistics encompassing 60,000 employees across 1,900 stores and six distribution centres.
“After an extensive search for the right candidates, we are delighted to welcome someone of Claire’s calibre to our team,” Banducci said. “Woolworths is one of Australia’s most iconic brands. The strategy for our transformation is clearly defined and starting to deliver results. Claire has a proven track record in working with teams to deliver against key strategic objectives and she is the right person to work with our tea to continue the good progress we have already made.”
Peters will assume the role on 1 July 2017.
Image: Alpha on Flickr.

200 Woolies staff to lose jobs

Woolworths’ decision to outsource road transport services to trucking company Linfox could affect as many as 200 workers in Victoria.

The outsourcing is expected to take place in April and May with Woolworths saying it would explore all avenues to minimise job loss.

However, staff not redeployed within Woolworths will be offered a redundancy.

The grocery giant said it has invited Linfox to talk to staff about potential positions at the trucking company.

The change brings the company’s transport services in Victoria into line with other areas of Australia that have already been outsourced.

“We will work with the 200 staff to redeploy them within the Woolworths business,” a Woolworths statement said.

“Staff who are not redeployed will be offered a redundancy, and we will work through these details with staff and the union.”

Last year Woolworths came under fire with accusations from the Transport Workers Union (TWU) that tight deadlines forced on drivers are unrealistic and forcing them to drive unsafely.

He said the larger transport industry is being impacted by the behaviour of the major supermarkets.

But Australian Logistics Council chief executive Michael Kilgariff told the ABC the latest claims from the TWU need to be substantiated and he believes there is enough regulation in the industry.

"The Australian Logistics Council has a retail logistics supply chain code of practice which deals with these issues such as waiting times, and both the carriers and the supermarkets are very focused on making sure that we don't have these sorts of situations occurring,” he said.

"The supermarkets are currently liable under chain of responsibility laws – as is everybody in the supply chain – for incidents that may occur anywhere else in the supply chain where it can be demonstrated that they somehow caused it to happen.


40 million-dollar Woolworths contract

Australia’s largest retailer, Woolworths, has awarded a $40 million supply contract to the Glen Cameron Group, a privately-owned transport and logistics company.
Camerons will be responsible for the delivery of goods and produce to Woolworths supermarkets and liquor outlets in South Australia for the next five years, starting 18 May.
Woolworths operates about 53 supermarkets and 64 free-standing liquor outlets in the region and Glen Cameron Group will manage about 850 store visits each week, delivering more than 10,000 pallets of stock.
The contract will be serviced by a management team of five full-time Cameron’s staff and 43 transport workers. Employment opportunities for drivers and support staff will rise during peak delivery times. 
Cameron’s managing director Glen Cameron said the Woolworths contract win was a “testament to our team, our fleet and our service offering”.
“Woolworths has a requirement for a modern, green and clean fleet,” Mr Cameron said. “Driver safety and our ability to meet demanding delivery schedules were crucial to our contract win.”
Glen Cameron launched Camerons in 1975 with a first-year turnover of $160,000. At 22 years old he was the sole employee and his fleet consisted of one, eight-tonne tray, which was owned by a subcontractor.
Today the Glen Cameron Group employs 600 people, has a turnover in excess of $115 million, operates a national fleet of more than 520 vehicles and offers its customers a national logistics operation with more than 70,000 square metres of warehouse space.
Glen Cameron Group has office locations in all Australian states. The business operates five major divisions: local trucking, couriers, warehousing, third party logistics and interstate transport.
In 2006, Glen Cameron Group was awarded a contract to supply Coles supermarkets throughout Victoria and southern New South Wales with frozen and chilled product and has successfully managed this operation to Coles satisfaction.

Does your supply chain need Impetus?

GS1‘s supply chain conference, Impetus 2008, will bring together international and Australian experts to discuss key topics in supply chain management, including strategies for food businesses to cope with a 21th century pandemic such as SARS or avian influenza, major health reform, and automation of the meat and fresh produce aftermarket. 

The conference will also focus on data capture technologies, hearing from Simon Langford, director of EPC Strategies at Wal-Mart, who will illustrate strategy and learnings with EPC/RFID at the major US retailer and the ‘Sam’s Club’ wholesale club chain. Dr Sanjay Sarma, associate professor of mechanical engineering at Massachusetts Institute of Technology (MIT), will discuss the latest developments in RFID technology across the international market, and its implications for Australian businesses.

Other key speakers include Steven Newton from Metcash Limited, Prof Peter Dapiran from University of Melbourne and Richard Umbers from Woolworths.

Running concurrently will be a free trade show, the Impetus Expo, featuring the latest supply chain and technology products from more than 30 GS1 Australia Alliance Partners and associates.

The two-day conference will also celebrate the 30th anniversary of GS1 Australia, with the GS1 Australia Supply Chain Excellence Awards to be presented at the event.


Hear Woolworths on ‘RLSC Code of Conduct’

Come and hear Paul Driver, National Transport Safety Manager, Woolworths Limited speak about the Australian Logistics Council Retail Logistics Supply Chain (RLSC) Code of Conduct on Friday the 29th of February.

Paul has thirty years experience in Dangerous Goods Logistics, both in supply chain and 3PL transport. Paul is a member of the working party who developed the Retail Logistics Supply Chain Code of Conduct and is currently chair of the operations group.

The ten-point Code of Conduct establishes a clear set of principles for freight logistics, involving the retailer, supplier, carrier and logistics provider, allowing the industry to respond in a coordinated way to help all involved across the retail supply chain operate under a national set of retail logistics supply chain industry standards. The challenge now lies in implementing the guidelines and drawing more companies in to sign on to this industry code.

The ALC Retail Logistics Supply Chain Code of Conduct is now setting the standard for other sectors of the transport and logistics industry to follow. Come and learn why Woolworths became a part of it, what are the advantages, where to from here.

Friday 29th February, Lake Room, Waterview Convention Centre, Bicentennial Park (off Australia Ave), Sydney Olympic Park, Homebush. 7.00 am arrival for a 7.30 am commencement.

Supply CHain and Logistics Association of Australia (SCLAA) breakfast function, finishing at approximately 9.00 am. Cost is $45 + GST for members, $55 + GST for non-members, $405 + GST for a corporate table of ten. Breakfast included in all prices

Transport unions, don’t blame us: Woolworths

While the trucking industry continues to attack major retailers arguing they are refusing to pay fuel levies to drivers, Woolworths has said the industry is wrongfully placing the blame on the company.

Following a union-led protest staged at Rosehill, Woolworth has issued a statement saying the Transport Workers Union (TWU)’s claim against the company was “unfounded”.

“Contrary to TWU spin, Woolworths pay appropriate national fuel levies to all its transport providers and these are reviewed on a regular basis,” it said.

“Woolworths understands that there is genuine hardship across the transport industry and it is our expectation, and our transport providers’ responsibility, that these fuel levies are passed onto any drivers who are subcontracted by our direct transport providers.”

TWU has previously stated the major retailers like Coles and Woolworths increase the costs of goods using the rising fuel costs as an excuse, yet the levy is not passed down the transport chain to the drivers.

Woolworths added it recently wrote to its major transport providers requesting their assurance that they treat their subcontractors fairly regarding the issue.

It said while the company’s transport costs have soared, its extensive management strategy has enabled it to keep the food price inflation level at 2.9 per cent, below the national figure of around four per cent.

“As a company that depends on transport, Woolworths accepts that higher fuel prices are a fact of life and is investing heavily in more efficient technologies and trialling alternative fuels.

“Innovation and best practice leadership in transport are the direct result of investments made by major businesses such as Woolworths.”

The company said the industry needs to stop playing the blame game over fuel prices, and start to collaborate.

“All sectors of the logistics industry must work together to ensure that we can meet the challenges ahead rather than unfairly placing blame on selected participants,” it said.

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